Update on Merger with Polymetals - Notice of Meeting

2. Summary and Opinion
2.1 Purpose of the report
The directors of SXG have requested that BDO Corporate Finance (WA) Pty Ltd (“BDO”) prepare an
independent expert’s report (“our Report”) to express an opinion as to whether or not the Transaction is
fair and reasonable to the non-associated shareholders of SXG (“Shareholders”).
Our Report is prepared pursuant to section 611 of the Corporations Act and is to be included in the
Explanatory Memorandum for SXG in order to assist the Shareholders in their decision whether to approve
the Transaction.
2.2 Approach
Our Report has been prepared having regard to Australian Securities and Investments Commission (“ASIC”)
Regulatory Guide 111 (“RG 111”), ‘Content of Expert’s Reports’ and Regulatory Guide 112 (“RG 112”)
‘Independence of Experts’.
In arriving at our opinion, we have assessed the terms of the Transaction as outlined in the body of this
report. We have considered:
• How the value of an SXG share on a control basis prior to the Transaction compares to the value of a
share in the Merged Entity on a minority basis following the Transaction;
• Other factors which we consider to be relevant to the Shareholders in their assessment of the
Transaction; and
• The position of Shareholders should the Transaction not proceed, either because the Scheme is not
approved or the Transaction is not approved.
2.3 Opinion
We have considered the terms of the Transaction as outlined in the body of this report and have
concluded that the Transaction is fair and reasonable to Shareholders.
2.4 Fairness
In Section 12 we determined how the value of an SXG share on a control basis prior to the Transaction
compares to the value of a share in the Merged Entity on a minority basis following the Transaction, as
detailed hereunder.
Ref
Low
$
Midpoint
$
High
$
Value of an SXG share prior to the Transaction (control basis) 10.4 0.031 0.038 0.044
Value of a share in the Merged Entity (minority interest basis) 11.3 0.032 0.038 0.045
The above valuation ranges are graphically presented below:
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